&nbsp Unless you have an open mind, I would suggest you not read this, especially if you're young and a Nintendo supporter.

As with all my articles, I'm stuck to the truth, and I try not to interject anything other than the occasional humor, along with the solid facts...

"Draw from the facts what you will, just don't forget the facts." - Dustin D. Brand April, 19, 2001.

A day following the news of Microsoft's XBOX Dolby Digital deal, Nintendo announced a delay of it's upcoming kids gaming console, the GameCube (with a title like the GameBoy, and working with the GameBoy Advance). Obviously this means little to Nintendo Supporters who think Microsoft is going to fail, and given Nintendo's history of delayed, if not completely unreleased systems alltogether, this isn't a surprise.

So what I'm about to tell you shouldn't be either. Nintendo may not even release a GameCube at all...EVER.

Nintendo's president and CEO, with a huge reputation for speaking his mind, often not exactly at the best time, had this to say April 18, 2001 in a Japanese Press Conference. Yes, I will provide you with the orginal link, use a Japanese->English Dictionary if you don't believe me.

Yamauchi commented that "if the GameCube is not received well at E3, our strategy will be compromised, and that will cause a serious blow to our plans. We may even have to consider pigeonholing the sale of GameCube."
Source: Nikkei Net (Japan News Source)

Let me explain why Yamauchi said such a thing. Keep in mind, Hiroshi Yamauchi is a business man-the-CEO, and he makes the decisions for Nintendo as a Company. First of all, Nintendo, despite what many say and think, isn't doing very well as a company. Let me explain why.

Nintendo said Wednesday that its earnings for the fiscal year ended last month are likely to be better than expected. The company attributed this to the decline in the yen, which has boosted the value of the company's assets in yen terms. This was in Japan time though, and if anyone hadn't noticed, our markets have been up BIG TIME in the last 2 days, our time. Japan is about 1/2 day ahead of us in GM Time. The yen is sure to follow our dollar, it always does, putting Nintendo's "likely" back to nothing.

The world's second-largest home computer game maker also said it plans to change its company rules in June (the same month the GameCube was supposed to launch in Japan) to enable a buyback of up to 14 million of its own shares, or about 10 percent of its outstanding stock.

Now first of all, when a company buys back it's stock, do you know what that means? Much less impact from the public market on your company's assets since you own the stock. I shouldn't need to explain that to you, but it basically means Nintendo is preparing for a huge negative stock impact.

Nintendo said the consolidated pretax profit from operations would be increased 75 percent to $1.54 billion (190 billion yen), up from its earlier estimate of 147 billion yen, as the strength of the dollar against the yen helped the company post a foreign exchange profit.

Nintendo said the company has about $6.5 billion (800 billion yen) in cash and bank deposits denominated in foreign currencies such as U.S. dollars and German marks. Microsoft is spending Half a Billion just to MARKET the XBOX. Does that give you an idea of the size of Nintendo vs Microsoft or Sony?

The company did not give a timeline or price for the buyback, but said that the move was aimed at boosting its return on equity, and to protect the company from becoming an acquisition target. Group return on equity is expected to have risen 4.7 points to 12.4 percent. The yen is currently traded at about 123.15 to the dollar. Please note Nintendo's use of the word "Protect", I told you they're preparing for a negative here.

However, Nintendo's decision was a pleasant surprise for the market. Nintendo shares closed at 21,280 yen in Tokyo, up 8.52 percent from Tuesday's closing price.

Nintendo President Hiroshi Yamauchi earlier had brushed aside criticism by financial analysts that the company was inefficiently using its abundant cash. Yamauchi had said that a company in a risky software business needed to have such monetary resources always at hand. The company last year purchased its new corporate building in cash.

But Nintendo expects lower group sales of about $3.75 billion (462.5 billion yen), down 13 percent from about $4 billion (500 billion yen). The declining popularity of Nintendo 64 game consoles and software dragged down the sales figure, despite its strong gains from the GameBoy handheld console series.

Sales of the GameBoy series, both hardware and software, increased 13 percent to some 260 billion yen. More than a million units of GameBoy Advance have been shipped since its 21 March release in Japan. But the demand for the handheld games remains weak for the company overall.

The declining sales of Nintendo 64 is also likely to result in a 41 percent drop in Nintendo's operating profit. The company expects about a $692 million (85 billion yen) group operating profit, down from its November 2000 forecast of about $846.5 million (104 billion yen).

So what does all this market data, and corporate shifting in policy and business mean to Nintendo...better yet Microsoft and the XBOX?

First of all, for Nintendo's CEO, to even hint at not ever releasing "pigeonholing" the GameCube should make people think, maybe 1, 2, or 3 more times. Nintendo is clearly making some serious changes by buying 10% of their unsold/outstanding stock.

While it's evident that Nintendo doesn't pose an initial threat to the Microsoft XBOX because of the extremely different target markets, if Nintendo doesn't sell the GameCube at all, Nintendo as we know it is no longer.